Options were specific to CEO role – Koos Bekker

Naspers chairman responds to reports of his cashing in nearly 11.7 million Naspers options.
Koos Bekker, chairman of Naspers

Naspers chairman Koos Bekker cashed in nearly 11.7 million Naspers options as the options were issued specifically as remuneration during his tenure as CEO of the company.

He could not afford to pay for the options from his own means at the end of the period, due to the extent the shares had appreciated in value.

In an emailed response to Moneyweb questions, Bekker said the options were issued for the specific period between April 1 2008 and March 31 2014 – the period he was appointed CEO of the company. “The options were issued (in lieu of a salary and bonus which was fairly unique at the time) to reward the net growth in value in the shares, adjusted for inflation.

“The profit was calculated as follows: the market value of Naspers shares at the end of the five-year period, minus the market value of the shares at the beginning of the period, adjusted for inflation over the period.

“This resulted in a profit as the value growth exceeded the rate of inflation. On this profit I paid tax at the marginal rate.”

Bekker said there is a simple reason why he exercised the options. “These shares were issued specifically for the position of CEO and this role came to an end (on March 31 2014). In no way, given the amounts payable for the original purchase price plus inflation and tax payable, could I afford to take the money from my pocket to exercise the options myself. That is implicit.”

Naspers’ share price on April 1 2008 was R162.50 and closed more than 610% higher at R1 161 on March 31 last year. This appreciation flowed from Bekker’s leadership and the company transformed from a South African and print-focused media company with a market cap of R5.6 billion, to an international media goliath valued at more than R700 billion.

It is not clear at which price Bekker exercised the options, as they were only due to expire in 2018. Bekker exercised the options between April 1 2014 and March 31 2015 and during this year the Naspers share price surged to a high of R1 870 a share.

The share is currently trading at R1 736.

The fact that Bekker had exercised the 11.7 million options was disclosed in the latest Naspers annual report. No SENS announcement was issued, as Bekker was not a director of the company during this period.

Bekker retired on March 31 last year and only recently assumed the position as chairman of the company.

The 4.7 million shares Bekker still own are worth R8.1 billion.

COMMENTS   11

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He worked for it and it is his right to do as he wishes. He doesn’t have to explain his private business to anyone.

Agree he worked damn hard for it, did wonders for the company and my portfolio. It is yours to enjoy. Plus lets just add he NEVER stole/embezzled/defrauded or engaged in corrupt practices. Unlike our politicians and some well connected nephews/grandchildren etc. Aurora….. the list is endless.

Can we please put this issue to rest and let Mr Bekker have some peace. Congratulations on an amazing career where significant value was created for shareholders, employees and tax authorities worldwide!

I agree with you and would like to add that at no point did he lie/steal/defraud or be corrupt unlike some of out politicians and well connected grand sons and nephews………………Aroura etc the list goes on.

It would be absolutely marvelous if many more CEO’s took this approach with their salaries and options, it would make interesting future values of companies and would cap the mining companies from overpaying their executives, who don’t really expand the wealth of shareholders

The issue is about disclosure. Mr Bekker can sell as many shares as he likes, but some shareholders are upset though over the lack of disclosure (real-time SENS instead of annual report long after the fact). Using your sabbatical period to surreptitiously offload a large stake could be construed as unethical. It’s slimy lawyer ‘technicality’ territory. Let’s be frank – Naspers used apartheid era connections to secure a monopolistic Pay TV license, and then used the billions in cash flow generated from this to make various investments (including Tencent). Instead of being congratulated, I think many of these Naspers stakeholders should be investigated for corruption (eg how was original license secured, and did any of the apartheid era politicians receive kickbacks?). Put another way – if I pointed a finger at other corrupt African politicians and businessmen, would you say I was simply envious of their wealth?

Seems like sour grapes for not owning any Naspers shares… And I guess you still use DSTV. Enough with the conspiracy theories and hypocrisy please. Would love to see the evidence supporting your accusations – some in legal circles might call comments of this nature defamatory.

Having met the man a few times, I can without doubt say he has one of the most brilliant entrepreneurial minds globally. Apartheid connections can’t build a business like Tencent – requires a little more insight, foresight, hard work and determination to succeed in China.

The DSTV monopoly generated billions in cash flow that Naspers could invest in an investment ‘lottery’. Tencent was the one that paid off – big time (many others had to be written off). And they didn’t build anything in China – they simply used their (apartheid-era ill gotten?) gains to acquire a minority interest in Tencent. The locals in China built that company to what it is today. Let’s see how Naspers and DSTV copes with competition now that internet streaming TV is here.

He didn’t sell shares, he exercised his options. There is a difference. You are suggesting that he did this surreptitiously. What did he gain by not advertising he action which he was not legally required to do? What harm did he do to you and other shareholders? He paid his tax, so the poor will get a fair chunk (41%) – had he not exercised the options, SARS coffers would be that much poorer, no? I think it is indeed envy that motivates your comment, not simply jealousy (I like Loane Sharpe’s distinction between the two). Certainly not admiration. I think Reality Check’s comment says it all.

George dry your eyes and move on>

Yes, of course everyone that benefited from the apartheid regime would want us ‘to move on’. But I think something like an Economic Truth and Reconciliation Commission is needed before we can truly move on. Many shadowy deals were struck in the dying days of apartheid, and we need to investigate these allegations. The same people that bleat about political corruption today, were linked to organisations like the Broederbond who looted the national treasure in apartheid’s heyday. These are the true villains who need to be brought to justice.

End of comments.

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